The Brazilian club league has made a breakthrough: 18 clubs have signed a letter of intent with Kodajas Sports Kapital. The document proves that the company will make an offer to purchase a percentage of the future bullion. The company’s gesture to invest US$1 billion (5.46 billion R$) in the ingot. The money will be split between clubs, and Codagas will have a percentage of all league revenue.
The agreement was signed a month ago by the following clubs: CorinthiansPalmeiras, Santos, Sao Paulo, Red Bull Bragantinoflamingo Basque, Botafogo, Syndicate, international, Atletico MGAnd Sea tripBahia, Ciara, Fortaleza, Cuiaba, Atlético jo NS Chapecoense. Thus there are 15 teams from Serie A and three teams from Serie B.
These associations signed a letter of intent with Kodajas, a group led by attorney Flávio Zveiter and CEO Richard Fort. The company raised the investment with the Advent Fund, which has invested in tournament rights around the world.
Information about the LOI was first provided by GE and confirmed by the blog.
Under the terms of the signed document, the clubs commit for two months not to sell the rights to the 2025 Brazilian Championship onwards. During this period, Kodajas will assess the value of the Brazilian League. From there, you must bid to buy a percentage of the league up to a maximum of 25%.
In a preliminary analysis, the bullion was valued at $4 billion. But that amount should change when the more in-depth process of how much will be paid for the tournament is complete. It is true that the funds available for investment amount to one billion US dollars.
From the offer, both the percentage to be purchased from the league and the time commitment must be negotiated. Initially, Kodajas set a goal for clubs to agree to play the league for 75 years. Among the clubs, this period is considered too long. Private equity funds, such as Advent, typically do business for up to ten years.
There is no obligation in the signed agreement to accept the proposal or carry out the transaction. A letter of intent – called a “letter of intent” (LOI) – is still the first step. It can then develop into a memorandum of understanding and, in the future, into a contract. The term of the letter expires in about a month. During this period, the Kodajas must submit a formal proposal.
It is true that the document makes it clear that these 18 clubs applied with the intention of jointly selling their rights to Brazilian citizens. There is also an intention to take over the organization of the entire league, which could happen in 2023. But this depends on the almost total membership of the Serie A teams.
The biggest resistance at the moment is from Athletico-PR led by Mario Celso Petraglia. He quarreled with other officials during the league discussion and refused to commit to this deal. He also resisted the chief of Fluminense, Mayor Bettencourt. But, among other clubs, he is not seen as a hardliner.
Kodajas was one of the companies that made an offer to partner with the league when there were the first meetings of the group of clubs to form the league. The movement began in the middle of the year, and then subsided due to internal disagreements. Behind the scenes, the league kept going until it reached that first deal.
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